Page 4 - MEOG Week 42

MEOG Commentary MEOG
ADNOC signs Ghasha
deal, signals
downstream intent
ADNOC last week signed a deal that heralded the entry of Russia’s Lukoil to the emirate’s oil and gas sector as well as stating its intent for major downstream expansion.
Uae
What:
The Lukoil deal is joined by a framework deal for investing in the Ghasha concession as well
as broader increased collaboration between the uAE and Russia.
Why:
ADNOC has been increasing efforts to develop its large sour gas deposits.
What next:
The state oil firm also intends to expand refining capabilities at Ruwais
as it seeks to establish western Abu Dhabi as a major downstream hub.
Abu Dhabi’s state oil firm this week announced the signing of a significant upstream gas deal as well as stating its intention to increase refining capabilities in the west of the emirate.
Ghasha gas deal
Abu Dhabi National Oil Co. (ADNOC) last week announced that it had awarded a 5% stake in the Ghasha ultra-sour gas concession to Rus- sian major Lukoil. The Abu Dhabi government was also a signatory of the deal, which pertains to a large area off the emirate’s north-west coast encompassing the Dalma, Ghasha, Hail, Mubar- raz, Nasr and SARb fields.
Meanwhile, ADNOC, Lukoil and the Russian Direct Investment Fund (RDIF) signed a frame- work deal focussed on potential future collabo- ration on the Ghasha concession.
The move marks Lukoil’s entry to Abu Dha- bi’s oil and gas sector and the significance of the deals was implied by its witnessing by Crown Prince Sheikh Mohamed bin Zayed Al Nahyan and Russian President Vladimir Putin during the latter’s state visit to the emirates. The first was signed by uAE Minister of State and ADNOC CEO his Excellency Sultan Al Jaber and Lukoil President Vagit Alekperov, while the framework was signed by Al Jaber and RDIF CEO Kirill Dmitriev.
Lukoil’s deal will see it invest $190mn as a signing fee, with the Russian firm’s stake assumed to be deducted from ADNOC’s current 60% holding. The remainder of the total 40% inter- national shareholding in the concession is held by Italy’s Eni with 25%, Germany’s Wintershall with 10% and Abu Dhabi government-affiliated and Vienna-based OMV with 5%.
This move marks a noticeable departure from ADNOC’s customary approach of retaining a 60% holding in all producing concessions.
ongoing project
OMV had been working with ADNOC and the uS’ Occidental Petroleum (Oxy) at the Dalma, Ghasha and Hail fields since 2016 under a
four-year contract encompassing seismic sur- veys, drilling and engineering, and had been taking the lead on some of the early contracting on the development of the three assets.
ADNOC was also recently reported to have issued tender documents to contractors for $2bn worth of infrastructure and compression plat- forms for the sour gas project.
The Hail & Ghasha Package 1 is said to include offshore drill centres, subsea pipelines and compression platforms, as well as 400km of subsea pipelines and 212km of subsea cables.
Technical bids were submitted in late March for two engineering, procurement and construc- tion (EPC) contracts tendered earlier this year for offshore and onshore work on the first devel- opment project to be carried out at the Ghasha Concession.
The block covers an area in the north-west said to contain hundreds of billion cubic metres of gas. The exploitation of Dalma field is envis- aged generating production of 3.1-3.6 bcm per year of gas by early next decade.
For the onshore package, offers were reported to have been received from China Petroleum Engineering & Construction Corp., South Korea’s Hyundai Engineering & Construction, Petrofac, Saipem with Athens-based Consol- idated Contractors Co. (CCC), and Canada’s SNC Lavalin with the local Target Engineering.
The contract includes new gas dehydration and condensate treatment units, inlet facilities, a gas booster and other associated infrastructure at Arzanah Island.
bidders for the offshore contract are thought to include McDermott, NPCC, Petrofac, Saipem and the local Valentine Maritime, for a deal cov- ering three new wellhead platforms and the modification of existing topsides plus pipelines and cabling.
uS-based KbR is the project management consultant and TechnipFMC is the front-end engineering and design (FEED) contractor.
The joint development of the Ghasha and Hail fields is anticipated to produce 10.3 bcm
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w w w . N E W S B A S E . c o m Week 42 22•October•2019